A labour arbitrator recently held that the Canada Labour Code prohibits a federal employer from terminating an employee who had not worked for 21 years.

In 1989 the grievor suffered a serious injury at work and had not worked since. For 21 years, he had retained his status as an employee, and the employer made monthly contributions to continue his health benefits, and to his pension plan. However, in January 2011, the employer terminated the grievor's employment, resulting in an end to his benefits. The union grieved the termination.

The employer claimed that the grievor’s contract of employment had been frustrated because there was no possibility that the grievor would be able to work in the future. The union relied upon Section 239.1 of theCanada Labour Code which states that no employer shall dismiss an employee because of an absence from work due to a work-related illness or injury. The union argued that Section 239.1 superseded the common law doctrine of frustration and prohibited the employer from dismissing the grievor.

The arbitrator upheld the grievance and reinstatement the employee. The arbitrator concluded that Section 239.1 applied and the grievor’s termination was without just cause because he was dismissed as a result of his absence from work due to work-related illness/injury. The employer was ordered to reinstate the grievor’s benefits and pension payments, as well as reimburse the grievor for any expenses incurred that would have been covered by the benefits plan had the grievor's enrollment continued.

Kingsway Transport v. Teamsters Local Union 91, [2012] C.L.A.D. No. 124